How the FCC sees Broadband's 95% Success as 100% Failure

Some very creative and determined pessimists at the FCC have managed to turn a thrilling victory into an agonizing defeat.

As of June, 2011, 95% of all Americans had access to broadband Internet from cable, DSL, fiber or other wired services. That’s up from 15% as recently as 2003, and zero percent in 1996, when high-speed Internet didn’t even exist.

Yet the agency’s three Democratic Commissioners nonetheless hung their heads and announced, for the third year in a row, that broadband deployment in the U.S. is just not happening fast enough. That was the conclusion, in any case, of a nearly 200-page report published on Tuesday, the eighth annual “Broadband Progress Report.”

That bizarre finding matters. Under section 706 of the 1996 Communications Act, the FCC must make an annual determination of whether broadband “is being deployed to all Americans in a reasonable and timely fashion.” If not, the agency must take “immediate action” to remove barriers that are keeping network operators from spending their investors’ money even faster.

Which translates, on the majority’s view, into a vast array of regulatory powers that otherwise aren’t available to the agency. Like the power to create “digital literacy” programs. Or the power to raid the $8 billion Universal Service Fund—a tax on your monthly phone bill intended to subsidize basic phone service for those who can’t afford it–to provide broadband Internet for low-income and rural residents, as well as buying computers for libraries and schools.

Or the power to enforce the agency’s notorious 2010 “net neutrality” rules, which were, not coincidentally, adopted only a few months after the FCC found for the first time ever that broadband adoption wasn’t happening in a “reasonable and timely fashion.”

(With no actual authority from Congress, the agency’s Democratic commissioners announced that the negative finding of the 2010 Broadband Progress Report magically conferred on the FCC the superpower to police broadband Internet access. Later this year, a D.C. court will hear arguments that section 706 has no such effect, and will likely throw out the rules sometime next year as an absurd overreach of agency authority.)

Whatever the scope of section 706, the Commission only gets its extra powers by finding a way to play Debbie Downer on the state of broadband deployment. How to do it? In the teeth of dramatic evidence of a stunning broadband infrastructure build out that has continued throughout the economic downturn, the majority cynically ignores the “reasonable and timely” language and simply concludes that “all Americans” means each and every person in the U.S.

“The standard against which we measure our progress is universal broadband deployment,” the majority solemnly concludes. “We have not achieved this goal as of yet and likely will not achieve it in any reasonable timeframe absent continued implementation of the Commission’s broadband-related initiatives.” Until Ted Kazinski’s old Montana mountain shack gets a DSL line, in other words, we’ll never be at “reasonable and timely” deployment.

And that means the agency’s power will continue to grow, leaving network operators perpetually uncertain how far the FCC will insert itself into the broadband ecosystem. As Republican Commissioner Ajit Pai wrote in a dissenting statement, “If we are willing to set an objective with no intent of reaching it, then I suppose that this is not a problem.” Here in the real world, of course, it is a very big problem indeed.

The Good News is the Bad News…Somehow

Let’s look at some of the good news scattered throughout the report. Then let’s see how the majority managed to turn the feel-good story of the year into a tear-jerker:

Since the first cable modem was introduced in 1997, America’s broadband infrastructure has been built almost entirely with private funding. Broadband network operators have spent over $1 trillion dollars to lay cable and fiber, and upgrade network equipment to reach ever-faster Internet speeds. (The report currently defines broadband as 4 Mbps download and 1 Mbps upload, but newer networks will are capable of much faster speeds.)